Thanks to its efficiency and multi-modality capabilities, rail has become an increasingly popular mode of transit for businesses at the Port of South Louisiana.
Though it’s been around for more than 150 years, rail is experiencing a bit of a renaissance recently, especially when it comes to ground freight transit.
According to the Association of American Railroads, domestic freight rail moves 1.7 billion tons of material annually across roughly 140,000 miles of privately-owned lines that run through every state but Hawaii. Average rail rates are 44 percent lower today than they were in 1981 – affordability that saves U.S. industries (and by proxy, consumers) billions of dollars each year and keeps American entities competitive in the global marketplace.
Beyond economic efficiency, rail offers environmental benefits, as well. Even though rail accounts for 40 percent of domestic long-distance freight volume, it’s only responsible for 1.9 percent of U.S. transportation-related greenhouse gas emissions. As Robynn Tysver, the communications manager for Union Pacific Railroad, points out, “We can move one ton of freight 454 miles on a single gallon of diesel fuel, and our trains are three to four times more fuel efficient than trucks. In fact, a single Union Pacific train can carry as much freight as 300 trucks.”
“Freight railroads in the United States, quite frankly, are the best in the world and they are a critical economic resource,” says Trish Haver, Senior Consultant at Strategic Rail Industrial. “Rail serves every industrial, wholesale, retail and resource-based sector of our economy – there’s no sector of our national economy that rail doesn’t touch. It’s the backbone that’s always been there.
“But the pivot that’s happening – and why people are starting to think more about rail – is that rail is incredibly environmentally friendly. It does reduce truck traffic on the highway. It does reduce our carbon footprint, as a whole.”
Clients within the Port of South Louisiana can import/export materials and goods via three railroads: Union Pacific, Canadian National and Kansas City Southern – all of which are equipped with multi-modal capabilities such as rail-to-barge or truck-to-rail, for example.
“At the Port of South Louisiana, the service that (Union Pacific) provides complements other modes of transportation, allowing our customers to connect to an integrated network of transportation options that includes trucks, vessels, barges and pipelines,” Tysver says. “They can then utilize Union Pacific’s more than 32,000 miles of track to reach the 23 states that we serve directly.
“There are examples up and down this section of the Mississippi River where you can see how Union Pacific complements our customers’ use of other transportation modes to meet their individual transportation needs.”
Both the Kansas City Southern and Canadian National lines are situated on the east bank of the Mississippi River and service resident clients looking to move product to the Midwest, Mexico and Canada. Thanks to a railroad spur that was constructed less than a decade ago, the KCS and CN rail lines are linked, which allows companies to transfer tracks without leaving the port jurisdiction. The spur gives logistics coordinators the chance to reach different markets more efficiently.
In July 2020, Canadian National announced plans to immediately invest $60 million into its Louisiana operations to support growing demand and enable supply chains. The strategic investment will fund the replacement of rails and ties, plus other infrastructure maintenance.
“First, I think it’s important to highlight how unique it is for the Port of South Louisiana to have three railroads operating within its port jurisdiction,” Haver says. “Most ports around the country have maybe two, at best. It’s a special and unique position at the Port of South Louisiana because of the tonnage and how much of that tonnage is attached to rail. It’s a powerful combination.
“And having that rail foundation allows businesses to tap into different parts of the country that may not be accessible by barge or truck,” Haver continues. “You’re looking at products coming down from Canada. You’re looking at products from the east and west banks of the Mississippi River, all the way through the Midwest – all of that comes via rail to the Port of South Louisiana.”
Conversely, Union Pacific is situated on the west bank of the Mississippi River and services the western United States. Within Louisiana, Union Pacific operates on more than 1,000 miles of track carrying products like industrial chemicals, plastics, petroleum products and grain. From 2016 to 2020, Union Pacific spent close to $500 million on Louisiana tracks, structures and facilities.
“The marketplace is always changing,” Tysver says, “and Union Pacific adapts to meet our customers’ needs.”
Within the Port District, one of Union Pacific’s largest customers is the DOW chemical facility in Hahnville – a customer that saw a 40 percent increase in rail cargo from 2013 to 2018. To meet DOW’s needs (and in turn, the needs of Union Pacific) the Port constructed a multi-million dollar rail yard at its SoLaPort site right next to DOW. The Port has signed a 20-year lease with DOW for use of the rail yard – a just-completed project that will increase DOW’s railcar capacity by more than 25 percent.
“This project is exemplary of the multi-modal opportunities along our 54 mile port jurisdiction,” says Port of South Louisiana Executive Director Paul Aucoin. “Although the Mississippi River is our anchor resource, the rail systems, roads and air facilities we have complement the extraordinary work done at the Port. We are pleased to partner with Dow in order to enhance their operations.”
The new rail yard will be a storage area (no loading will take place) and house 250 railcars – about half of which will be empty while the other half hold plastic materials ready to be sent to customers via Union Pacific.
“Not only did (the Port) provide a custom solution to an existing shipper that allowed them to grow and create more revenue and more impact on the community, it actually created more jobs,” Haver says. “One rail yard produced 5-6 permanent jobs within the Dow facility. That’s a powerful concept: Not only does rail provide more commerce, it provides more work and employment opportunities, too.”
